• Save
Ch 12
Upcoming SlideShare
Loading in...5

Ch 12



Chapter on the Fed - Taken from Introduction to Business

Chapter on the Fed - Taken from Introduction to Business
Glencoe - 2006



Total Views
Views on SlideShare
Embed Views



0 Embeds 0

No embeds


Upload Details

Uploaded via as Microsoft PowerPoint

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
Post Comment
Edit your comment

    Ch 12 Ch 12 Presentation Transcript

    • pp. 174-189 Chapter 12 Money and Financial Institutions
    • The History of Money In the monetary system goods and services are indirectly exchanged using money, which can then be exchanged for other goods and services.
    • Graphic Organizer Functions and Characteristics of Money Graphic Organizer FUNCTIONS
      • Medium of exchange
      • Standard of value
      • Store of value
      • Stable
      • Scarce
      • Accepted
      • Divisible
      • Portable
      • Durable
    • Banking The banking system is the main type of financial institution, or organization for managing money, in our economy.
    • Storing Money A bank account is a record of how much money a customer has put into or taken out of a bank.
    • Storing Money Checking accounts are used for storing money in the short term so you can draw on it easily if you want to go shopping or pay a bill.
    • Storing Money Savings accounts are used for storing money over a long period of time.
    • Storing Money Interest is a rate the bank pays you for keeping your money there. If a bank pays you 5 percent interest per year on a $1,000 savings account, you’ll have earned $50 after one year.
    • Transferring Money Banks make it easy to transfer money from one person or business to another.
    • Transferring Money Today more banks are using electronic funds transfer (EFT) to move money around. With EFT, money is transferred from one account to another through a network of computers.
    • Lending Money The money you deposit in a bank makes it possible for the bank to lend money to other customers.
    • Lending Money Most bank loans require some form of collateral. Collateral is something valuable you put up for a loan.
    • Lending Money The four main types of loans that banks offer are:
      • A mortgage loan
      • A commercial loan
      • An individual loan
      • A line of credit
    • Lending Money A mortgage is a deed to give the property to the lender if the loan is not paid back.
    • Other Financial Services Many banks provide financial advice on managing and investing your money. You can also store valuable items, such as jewelry and certificates, in safety-deposit boxes.
    • Other Financial Services Many banks offer credit cards. Banks also manage trust funds, such as an inheritance.
    • Commercial Banks Commercial banks offer a full range of services such as checking and savings accounts, loans, and financial advice. They are often called full-service banks .
    • Commercial Banks To make a profit, commercial banks usually charge much more interest on the money they lend than the interest they pay on savings accounts.
    • Savings and Loan Associations Savings and loan associations were originally set up to offer savings accounts and home mortgage loans.
    • Savings and Loan Associations The purpose of the savings and loan associations was to encourage people to save money and make it easier to buy a home or start a business.
    • Savings and Loan Associations Savings and loan associations charged lower interest on loans and paid higher interest on savings. In the 1980s about 20 percent of savings and loans failed.
    • Savings and Loan Associations The government passed new regulations allowing savings and loan associations to charge higher interest rates and offer more services like credit cards.
    • Credit Unions Credit unions are nonprofit banks set up by organizations for their members to use.
    • Credit Unions Credit unions offer members a full range of services, including credit cards, checking accounts, and loans.
    • Credit Unions Credit unions offer low-interest loans and pay high interest rates on savings accounts.
    • Other Financial Institutions Mortgage companies provide loans specifically for buying a home or business . Finance companies offer short-term loans to businesses.
    • Other Financial Institutions Insurance companies not only provide protection against things like fire and theft, but also offer loans to businesses.
    • Other Financial Institutions Brokerage firms that sell stocks and bonds may also offer a wide range of financial services to its customers.
    • The Federal Reserve System The Federal Reserve System (or Fed) is the central banking organization in the United States.
    • Functions of the Fed The six functions of the Fed are:
      • Clearing checks
      • Acting as the federal government’s fiscal agent
      • Supervising member banks
    • Functions of the Fed
      • Regulating the money supply
      • Setting reserve requirements
      • Supplying paper currency